Star Bulk Further in the Red Despite Cost Saving Efforts

Star Bulk posted a $105.2 million net loss for the first half of 2015, as well as a $65 million net loss for 2015's Q2.

Despite cost saving efforts, vessel divestment, and the cancelation of one newbuild order, Star Bulk Carriers Corp. (Star Bulk) reported $105.2 million net loss in the first six months of 2015.

The shipper also posted a $65 million net loss for 2015's second quarter, compared to an almost $3 million net loss during the same period last year.

However vessel acquisitions from Ocean Bulk Shipping LLC (Oceanbulk) and Excel Shipping (Excel) saw Star Bulk go from operating 17 vessels in Q2 2014 to 70 vessels by the end of 2015's second quarter.

While operating a considerably larger fleet, Bulk Star reports successfully reducing its average daily operating expenses per vessel.

"We strive to be among the lowest cost operators in the dry bulk space.

"One year ago, during the second quarter of 2014, our average daily operating expenses per vessel were $5,208 per day, and our average daily net cash G&A expenses per vessel were $1,288 per day, with total running cost amounting to $6,496 per day," said Petros Pappas, CEO of Star Bulk.

"Twelve months later, we reduced our average daily operating expenses by 17.2 percent, to $4,311 per vessel per day, and our net cash G&A expenses per vessel by 13.8 percent, to $1,110 per vessel per day, clearly validating our consolidation strategy and the resulting economies of scale.

"On a fully delivered fleet of 90 vessels, this reduction would be equivalent to approximately $35 million in annual cost savings."

Star Bulk says it has disposed of a total of 12 vessels since December, noting that it has also delayed the delivery of newbuilding vessels for 91 months, an average of 4.6 months per vessel.

"Commercially, we are striving to position our vessels in a flexible manner, so as to take advantage of this upswing in the market."

"As far as the long term is concerned, we have seen encouraging steps on the supply side, with high scrapping rates during the first half of 2015, very low new orders and significant delivery slippage.

In March, Star Bulk hailed 2014 as a "transformational" year despite its results swinging into the red, reporting a net loss of $11.7 million against a $1.9 million profit in 2013.